Getting Paid After You Are Out

“A Plan For Discharged Family Lawyers To Get Themselves Paid”
Los Angeles Daily Journal, Vol.119, Issue 171, September 6, 2006

The business of family law can often involve emotions of clients that change very rapidly.  As such, it is not unusual for attorney’s fees to correspondingly accelerate. During such a fee escalation one of the parties may discharge their attorney and there may be a substantial attorney’s fees receivable. Fortunately, the Family Code provides a mechanism where a former counsel can obtain an order for fees.  The case law history and underlying statutory scheme for an award of attorney’s fees to a discharged attorney in a family law matter was recently addressed in the case of In Re Marriage of Erickson and Simpson (2006 DJDAR 9511).

Debra Erickson had retained the services of a law firm to represent her in a divorce from Dennis Simpson.  After five months of representation, it was agreed between Erickson and the firm that the firm would no longer represent Erickson.  In due course, the firm filed a motion on behalf of Erickson requesting over $90,000.00 in attorney’s fees and costs incurred by Erickson to be paid by Simpson directly to the firm.  Further, Erickson filed a declaration in support of the firm’s motion indicating her concurrence with same.

Thirteen days after the motion was filed, the firm filed a Substitution of Attorney on behalf of Erickson, where they were substituted out as Erickson’s attorney and replaced by a different lawyer.

When the motion for attorney’s fees was heard, Simpson argued to the court that the trial court had lost jurisdiction over the motion because at the time that the motion was heard, the firm had been substituted out as counsel for Erickson.

Simpson appealed and the appellate Court affirmed the trial court’s decision.

In affirming the trial court, the appellate court noted that Family Code Section 272(a) authorizes the court to make an award of attorney’s fees payable directly to a party’s attorney.  Not cited by the court was Family Code Section 2030(a)(2) which provides the statutory basis for an award of attorney’s fees based upon comparative need and ability of the parties.

The appellate court stated that case law had placed “limits” on the trial court’s power to make an attorney fee order payable to the attorney rather than to the spouse.

The appellate court first cited the case of Meadow v. Superior Court (1963) 59Cal.2nd 610.  In Meadow, the wife had discharged her attorney, after the trial court ordered that the husband pay $7,500.00 of wife’s fees directly to her attorney.  Thereafter, the wife and husband made a different agreement that provided, among other things, that husband did not have to pay $7,500.00 of attorney’s fees to wife’s attorney.  When presented with this new agreement, wife’s attorney refused to sign the agreement.  The wife then discharged her attorney.  Prior to signing a Substitution of Attorney, the wife’s discharged attorney filed a motion seeking additional attorney’s fees to the attorney payable from the husband.  The court in Meadow denied the attorney’s request for fees based on the fact that the right to award fees are granted to the party, for that party’s benefit, and are not a separate and independent right that the discharged attorney has.

In describing the Meadow case, the appellate court in Erickson/Simpson said “The Meadow court emphasized that only the wife had the right to apply for attorney’s fees…the attorney was required to seek compensation from the wife in a new action, and not by application in the dissolution action.”

Not cited by the court in Erickson/Simpson is the case of Wong v. Superior Court (1966)246Cal.App.2nd541.  The Wong court determined that an attorney could not seek an award of attorney’s fees in a dissolution action against the attorney’s own client.  Essentially, the court in Wong felt that the need and ability provisions found in the predecessor statute of Family Code 2030, were the essential basis for awarding attorney’s fees within a family law matter, and that between an attorney and the client the contractual obligations are not appropriately address in a family law matter.

The second case that the court discussed is In Re Marriage of Borson,(1974)37Cal.App.2nd 632.  The Borson case involved an attorney who was discharged, but filed a motion on behalf of wife requesting attorney’s fees from husband prior to filing a Substitution of Attorney.  Only at the hearing of the motion did the wife object to the motion for fees.  However, the court in Borson sustained the trial court’s award of attorney’s fees.

The court in Erickson/Simpson stated “The Borson court concluded the discharged attorney had the implied authority to file a motion on the wife’s behalf seeking the husband’s payment of the additional fees owed to them…the wife made no objection to the request for fee payment at the time the discharged attorney’s filed their motion for fees…the wife’s objection surfaced only at the time the attorney’s fees motion was heard…given the wife’s acquiescence in the attorney’s fees motion at the time it was made by the former attorney, the Borson court construed the motion as having been brought on behalf of the wife, and held the trial court had jurisdiction to make the award.”

The third case that the appellate court discussed was In Re Marriage of Read, (2002)97Cal.App.4th 476.  In Read, the wife discharged her attorney after an O.S.C. for attorney’s fees had been heard, but not yet ruled on.  The wife specifically instructed her attorney to cease work on her behalf.  The wife also advised the court of her instructions and asked the court to dismiss the Order to Show Cause for attorney’s fees that was under submission.  It is unclear as to whether or not the court ever received this notification.  In any event, the court rendered a ruling in favor of wife to receive attorney’s fees from husband.  The day after the ruling wife’s discharged attorneys filed the substitution of attorney.  The wife’s discharged attorneys then proceeded to enforce the attorney’s fee order.  The court in Read concluded that there was absolutely “… no basis upon which the wife’s former law firm could ‘reasonable believe it had implied authority to pursue the attorney’s fee order on (wife’s) behalf after she had discharged the firm and instructed it to make no further action on her behalf.’”

The appellate court, in reviewing all three cases stated that “the pivotal inquiry…was whether the client fee request pursued by the discharged attorneys was legitimately made on behalf of the former client with the former client’s approval. Because the right to have the fees paid belongs to the party, and not to counsel, the party must expressly or impliedly authorize a discharged attorney to pursue a motion requesting fee payments on the partial belief for the trial court to have jurisdiction over the motion.  In contrast, a party’s failure to convey the authorization is fatal to the court’s power to rule…Here, Erickson authorized the fee request…She expressly joined…stating she wanted Simpson to pay…fees directly to” the firm.

As such, what the careful practitioner learns from the Erickson/Simpson case is that a request made for attorney’s fees after discharged before substitution of attorney form has been filed, must be made with the explicit or implied authority of the client.  And the former client’s failure to “timely” object can been construed as implied authority.

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